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M&A flows and the foreign exchange markets:practical experiences

Author

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  • Martijn A. Schrijvers

    (De Nederlandsche Bank, Financial Markets Department, Amsterdam (The Netherlands))

Abstract

The large cross-border Merger and Acquisition flows of the last three years were seen by financial markets as one of the factors behind movements in exchange rates. However, the extent to which an M&A-transaction actually leads to a foreignexchange transaction is dependent on the financing and transaction techniques used and is difficult to measure. In this article, we analyse which considerations underlie the decisions of corporate Treasurers regarding the financing of take-overs and the techniques to be used by forex transactions. We investigate the effect Treasurers believe M&A transactions have on exchange rates and examine whether different techniques make for different effects. The information was obtained through interviews with Treasurers of multinationals conducting large-scale M&A activities.

Suggested Citation

  • Martijn A. Schrijvers, 2002. "M&A flows and the foreign exchange markets:practical experiences," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 55(220), pages 39-54.
    • Handle: RePEc:psl:bnlaqr:2002:13
    as

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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/9903/9785
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Acquisition; Acquisitions; Exchange Rates; Financing; Foreign Exchange; Merger;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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